Why isn’t the computer game business more like films?

February 26th, 2008

Just last week Electronic Arts offered $US 2 billion to purchase another publisher, Take-Two.

This is part of a continuing trend in the computer video game business, with the really big publishers consolidating. In some sense, this is a lot like the film business – the big studios make up a very substantial proportion of the total turnover of the industry.

But the big difference is with the next level down. In the film industry almost everyone is a contract player – directors, writers, and actors all move from studio to studio, only settling at one studio for the amount of time to make one or two projects. But in the games industry most of the ‘talent’ is permanently employed, staying with the company for many years.

This is odd – in many respects the requirements are the same. Video games are expensive undertakings these days – $10-20 million to produce, millions more to market and distribute. This is still well short of the cost of a major movie, but the gap is closing.

In fact, the structure of the video game industry looks a lot like the movie industry of the 1930s. The studio system lasted until the vertical integration of the industry was stopped and a single tycoon (Hughes) stepped in. At present, much like the 1930s film industry, the video game industry has a few stars (which, in this case, are the intellectual properties like Halo or Quake), and most people in the industry are relatively anonymous.

So what will change? My guess is that it will be the rise of the talent.

At present there isn’t a single famous video game writer, and only a couple of famous ‘directors’ (the analogy isn’t perfect, of course). In fact, if you look at the industry’s Game Developer’s Choice Awards the nominations for writing, art direction and so on only mention the game, not the actual writer!

That’s slowly changing. The enthusiast press has been paying attention to the project heads for a while, and is starting to pay a lot more attention to the writers as well.

Once people know the names, the names can ask for more money. A few people can do this now, but as the media pays more attention, more people will become famous (at least in the video game world), and they’ll start to move from project to project in search of better money.

And once that happens, then the game publishers are going to start to look a lot more like Hollywood – they own the IP for some of the series, and they bankroll the whole thing. But the people making the games aren’t usually tied to any one publisher, and they move around a lot more than is the case now.

And this will be a really good thing for games, because the best talent will be recognised appropriately, and the best projects will attract the best people.